Next Plc expects profit to expand to nearly £1 billion ($1.3 billion) this year as rising wages free up British shoppers to spend more on fashion.

The British fashion and homewares retailer, whose performance is a closely watched indicator of consumer demand, stuck with guidance it gave in January that it will generate £960 million of profit in 2024/25.

“It has been a long time since we started a year in a more positive frame of mind,” chief executive officer Simon Wolfson said in a statement Thursday, adding that the consumer environment is more benign.

Shares of Next rose more than 4 percent to a record high in early trading in London. The stock is up 29 percent in the past year.

Wolfson is known to be conservative in his outlook and typically beats expectations. Last year, the company made £918 million of pretax profit after raising its outlook five times as demand surged.

Next is considered one of the best retailers in the UK, with well-run stores and online operations. Its e-commerce hub — Total Platform — provides services that help other third-party retailers sell goods online.

The retailer has been on an acquisitive streak in recent years, buying brands including FatFace, Joules, Cath Kidston, and Made.com. The company also has control over UK fashion house Reiss.

Easing Inflation

“It’s not that we’re wildly optimistic,” said Wolfson in an interview. “It’s that we’re more positive than we have been for the last 10 years.”

Wolfson, who has run the retailer since 2001, said the company’s cost base is under control following an historic inflationary period and it has new avenues of growth.

“In many ways, it feels like we are now entering a new era,” he said.

By Jennifer Creery

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